Investing.com — Citigroupa expanded its biotech coverage on Wednesday, adding five more stocks to the roster including Amgen (NASDAQ:), Biogen (NASDAQ:), Gilead (NASDAQ:), Regeneron (NASDAQ:), and Vertex (NASDAQ:).
The firm initiated coverage on Gilead and Vertex with Buy ratings, citing solid growth drivers, while Amgen, Biogen, and Regeneron received Neutral ratings due to certain market challenges and pipeline uncertainties.
For Amgen, Citi analysts underscore the potential of its obesity and diabetes drug, MariTide, though the firm remains cautious due to competitive pressures in the GLP-1 market.
They believe the company’s growth outlook “hinges on MariTide clinical success and to a lesser degree, the trajectory for a number of newer products,” such as Tepezza, Uplizna, Krystexxa, and Imdelltra.
Vertex also earned a Buy rating at Citi, primarily due to its leadership in cystic fibrosis and the potential from new therapies, including the vanzacaftor triple combination for CF and suzetrigine for acute pain.
“Given consistent growth in CF, with multiple PDUFA dates in early 2025 and a clear path to broader diversification, we are very positive on the growth story for Vertex,” analysts led by Geoff Meacham wrote.
Meanwhile, Biogen’s Neutral rating reflects an acknowledgment of erosion in its core franchises, although near-term growth could stem from new launches in Alzheimer’s (Leqembi) and through potential mergers & acquisitions.
But despite pipeline developments, Citi cautions that “Biogen’s pipeline still looks to have higher clinical risk overall versus Big Biotech peers,” with key readouts in Alzheimer’s, multiple sclerosis, and Parkinson’s expected over the next two years.
Gilead, receiving a Buy rating, is viewed favorably for its robust HIV business and future potential from its HIV prevention drug lenacapavir, anticipated for launch in 2025.
“Led by Biktarvy, Gilead’s core HIV business continues to show strong growth with recent upside sales driven by higher demand not pricing,” analysts said.
“We see Biktarvy as the pillar of the HIV business as it continues to dominate share (>49%) in the HIV treatment market,” they added and cited potential upside from lenacapavir, Trodelvy in oncology, and growth within cell therapies.
For Regeneron, Citi’s Neutral stance hinges on expected declines in its Eylea franchise due to biosimilar competition. Still, the report states that “the long-term potential holds promise for growth,” supported by Regeneron’s Dupixent and Libtayo franchises.
Phase 3 results in melanoma and non-small cell lung cancer could be important catalysts for Regeneron, with data expected by late 2024 and 2025.
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